Pretty interesting pullback here indeed! I won't lie though, but this dribble lower action in the mark the past week or so has been pretty perfectly fine for me personally given that I'm still short s&p futures contracts here haha. Have basically been riding this market lower ever since Sept. 3rd NFP's. To be honest, I don't typically hold futures contracts for very long, but this one I felt really good about the r/r (risk / reward) going into it, as I had felt the market was getting a bit too top heavy on the upside, with the string of new ATHs seemingly everyday. And felt like that as we were heading into this month of September (which I know I've mentioned more than handful of times over the past little while here haha) was notorious for having a volatile reputation to it. Felt like putting on short contracts on the Spuz was a relatively low risk, and higher probability trade for the very short term at least. Turns out it was, as this has admittedly been one of my better futures trades in a while haha. Albeit, to be honest I haven't really put on many trades at all this year. So, to get the few that I have put on be winners like this is kinda nice lol. Still thinking more downside ahead (but no major correction or bear market yet though!), but I think as we are now very close to that 50 day moving average in the SPX cash, there could be some bounce action pretty soon, but ultimately am thinking will be of a dead cat variety if you will. We shall see. Hope you guys all been having a pretty decent trading week up to this point! Market finally getting some good action of late after the low volume summer doldrums grind.
Yeah those NFP numbers hit right around Labor Day, when @stock1234 said traders would be coming back into the market with volume and volatility. All the traders I know were buying the pullback yesterday. A little bleed lower today though, people haven't seen this in a year. And the funny thing is we're still only 2% off ATH.
...and there it is (like clockwork eh) now the question is, will this turn out being yet another face rip back to ATH? or perhaps a lower high (which i'm personally in the camp of for now). sure does seem like the retail investors are all in though on that 50 day touch as of now lol. will be interesting to see what happens with that. i still feel we'll find a lower low at some point in the latter part of this month, and here's why. chart below is of the spx historical performance in september from 1950 to current. if history is any guide, then after the initial pullback this month (that has been rather weak) has been followed by a bounce, then a pretty nice down draft right after that bounce has fizzled out (sometime just after midmonth). i'm thinking a similar pattern will play out here yet again as well. btw, i'm not calling for the end of the bull run, or the start of a bear market or even for a larger correction. nah. i do think that there is a pretty decent shot of at least seeing the bare minimum -5% dip this year (which still hasn't officially happened to this point yet) which takes cash spx down to about 4320ish. but, i'm even looking for a bit more to about 4200-ish give or take a few handles, before reversing course for the eoy santa rally. btw, just as a quick disclosure here. i've all but closed out my spuz shorts off of today's cash market open to lock in a good chuck of this downside move we've seen off of the ATH post-NFP. will be looking to re-enter on the short side again. monitoring for now.
ANALYSIS-China's house of cards: Evergrande threatens wider real estate market | Reuters Will be interesting to see if it will develop into some kind of black swan event not just for China but also the global markets
Seems like the right time to turn a little bit more bearish. We have possible tax hike, tapering might be coming soon, economic growth has slowed down from the peak and inflation is high, etc. Let’s see if we will really get the 5% pullback from the ATH this time
Just saw this, an awful mistake and not the first time it happened I would think, hope they do a better job in the future
Here are the notable earnings releases as well as the highest volatility earnings releases due out for next week courtesy of earnings whispers. And here is the market week ahead thread which is now up on the r/StockMarket subreddit for anyone looking for a quick read over this coming weekend: https://www.reddit.com/r/StockMarket/comments/pqciu1/wall_street_week_ahead_for_the_trading_week/ I hope you all have a splendid weekend, and a great trading week ahead. Pretty good to be back in the trading world after such a long hiatus personally. It's been a pretty decent start. Hope y'all's also had a great start to this month!
So, I legged back in on the short side in the Spuz towards the latter part of today @ 4422 (which interestingly enough was spot on where I had closed out my short from my initial 4542 entry on Sept. 3rd, earlier in the week lol). That being said, I feel like this could maybe prove to be a pretty poor entry for me, as I think there could be some RYFOR'ing (rip your face off rally) action next week (or at least to start the early part of the week), as we're basically sitting on the daily 50 moving average in the cash SPX. In fact, we actually did close just a touch below it at today's cash close. Hard to see it on the chart below, but perhaps the SPY chart might show it a bit better. Anyway, my guess is that there could be continued squirrelly action around this retail moving average. As investors try to grapple over whether this will be the bottom bouncer from here (yet again), and a trip back north bound back to fresh ATHs from here yet again.....or if it can (dare I say it) break this trend that we have seen since basically the start of this year, where the 50-day has been proven to stop every dip off an ATH dead in its tracks from getting much deeper than -5%. I'm still in that camp that says we'll break through it on the downside this time around, but it could be something like we saw back in March where it was sorta like a fake breakdown, and then a bounce right back over the moving average to new highs. Although, to be honest, I am still leaning for at least the full -5% dippage from the ATH, if not a little more (-7 to -8% and as much as -10%) personally. I think ultimately, a trip to test to big 200dma could be in the cards if the 50-day gives way pretty convincingly like I think it will this time. Or at least that's how I'm positioned for it anyway having put on 7 cars short on the Spuz from my 4422 entry late today. For as bad as these past few weeks may have seemed (perhaps for the newer investors/traders who haven't really experienced much of any real price drawdown in the SPX at all), I mean after all the SPX is still just only off -2.5% of its intraday ATH. I mean, that's kinda impressive to me at least, given the number of down days there have been vs. up days in the past 2 weeks. You'd think we'd be down a lot more by now, at least to -5% off the ATH. But, the truth is, it's only been -2.48% to be exact from today's (Friday's) SPX cash closing print from the intraday ATH. I mean, that's hardly any kind of noteworthy pullback IMO. It doesn't happen too often where we get this deep into the trading year where there hasn't even even a full -5% pull from a closing high to a closing low. But, that's precisely what we're dealing with here still as we're now into the middle of September. This could certainly all change on a dime too. But, as of now, this has really been about as garden variety of a pullback as we have seen in the SPX all year to this point imo. Saw this stat hit my twitter news feed earlier in the day. I don't personally read too much into these particular statistics myself, but feel it is at least taking note that the week after Sept. options expiration, has had a relatively strong downside bias historically speaking since at least 1982. Down 25 of the past 31, with an average decline of -0.94% in the SPX. Which interestingly kinda ties in with the historical performance of the SPX for this month of September dating back to 1950. Where weakness has been seen towards the latter part of this month. It's not all bad though tbh! Because, typically September has been the one notorious month for market volatility. But, usually once you get into Q4 (Oct-Dec period) has historically been a rather favorable quarter for the equity market. October in particular, and in Post-Election years (like this year) has been a bit mixed, but has been up 10 of the past 17, with the average return of +1% for the SPX. We'll have to see just how these next couple of weeks will shake out in equity land. Especially as we're now technically sitting just beneath that 50-day. Could be something big brewing or nothing at all. But, at least for me personally, I'm putting my $ where my mouth is lol. Like I've said a number of times before, I don't normally ever put on trades unless I really feel good about the r/r (risk / reward). Would have felt much better if I entered towards today's cash open, or even better, around yesterday's cash close. Hindsight's 20/20 of course, so it's very easy to say this now after the fact. Not making any excuses for myself, but truth here is I was largely away from my trade desk, and super busy with the IRL for a good part of yesterday and basically all day today. Sucks, but such is life.. I probably won't be able to monitor/trade the market much at all for these next couple of weeks ahead as well actually, as I had gotten word earlier today that my grandmother has now developed some concerning health issues. Needless to say, that's been on my mind quite a lot, and also running errands for the old man (which was p urgent), etc. Doesn't really give me much free time to look at the market, no less put on trades, etc, etc. But, since I do feel relatively good about the continued downside in the market over the next few more weeks, with it making lower lows from here, I'm thinking I'll just hold onto these shorts, but with a relatively tight stop in case the trade just absolutely doesn't go in my direction. Which is entirely possible, especially early next week. Anyway, that's all I got for this week! It's 2am eastern where I'm at right now. Was kinda wired tonight and couldn't sleep earlier so I figured I'd hop on now while I had some free time to myself to type this post out. But, now starting to feel drowsy so think I'll hit the hay now. Have a great weekend ahead guys! Will catch up with y'all's next week.
Oi. I have some 50+ stocks on my list. Not a single one is green this morning. Gonna be able to do some discount shopping soon?
